U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to .
Commission file number 33-93132
La Jolla Diagnostics, Inc.
(Exact name of small business registrant as specified in its charter)
California 94-2901715
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7777 Fay Avenue, Suite 160, La Jolla, California 92037
(Address of principal executive offices)
(619) 454-6790
(Registrant's telephone number)
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days:
Yes X No
As of February 16, 1999, La Jolla Diagnostics, Inc. had 19,876,539 shares
outstanding of the registrant's common stock, no par value.
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LA JOLLA DIAGNOSTICS, INC. AND SUBSIDIARIES
FORM 10-QSB
QUARTER ENDED DECEMBER 31, 1998
INDEX
PART I FINANCIAL INFORMATION PAGE
Item 1 Financial Statements (unaudited):
Condensed Consolidated Balance Sheets as of December 31, 1998
(unaudited) and June 30, 1998 3
Condensed Consolidated Statements of Operations for the Six
Months Ended December 31, 1998 and 1997 (unaudited) 4
Condensed Consolidated Statements of Operations for the Three
Months Ended December 31, 1998 and 1997 (unaudited) 5
Condensed Consolidated Statements of Cash Flows for the Three
Months Ended December 31, 1998 and 1997 (unaudited) 6
Notes to Condensed Consolidated Financial Statements (unaudited) 7 - 8
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 14
PART II OTHER INFORMATION
Item 1 Legal Proceedings - None
Item 2 Changes in Securities - None
Item 3 Defaults Upon Senior Securities - None
Item 4 Submission of Matters to a Vote of Security Holders -
None
Item 5 Other Information - None
Item 6 Exhibits and Reports on Form 8-K - Exhibit 17.2 15
SIGNATURES 16
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LA JOLLA DIAGNOSTICS, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1998 AND JUNE 30, 1998
(A Development Stage Company)
December 31, 1998 June 30, 1998
(Unaudited)
------------- -------------
ASSETS
CURRENT ASSETS
Cash $ 21,727 $ 1,307
Accounts receivable 23,538 3,735
Advances to officer, net 5,380 6,626
Inventory - Healthcare products 15,026 14,730
Inventory - Diagnostic products 492,703 -
Prepaid expenses 25,987 22,437
------------- -------------
TOTAL CURRENT ASSETS 584,361 48,835
INVENTORY, Antisera products 2,466,911 2,466,911
PROPERTY & EQUIPMENT, net 84,682 30,970
NOTE RECEIVABLE 493,100 493,100
OTHER ASSETS 954,558 2,781
------------- -------------
$ 4,583,612 $ 3,042,597
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 280,150 $ 335,959
Accrued expenses 64,732 24,658
Lease obligations, current portion 1,209 1,119
Loans payable 172,582 114,591
------------- -------------
TOTAL CURRENT LIABILITIES 518,673 476,990
LEASE OBLIGATIONS, non current portion 1,408 2,042
MINORITY INTEREST 723,872 555,069
STOCKHOLDERS' EQUITY
Common stock, no par value (50,000,000
shares authorized; 19,856,539 and
12,068,986 shares issued and outstanding,
respectively) 13,977,545 12,403,499
Additional paid-in capital 831,247 831,247
Preferred stock, no par (5,000,000 shares
authorized, none issued) - -
Retained deficit (11,469,133) (11,226,250)
------------- -------------
TOTAL STOCKHOLDERS' EQUITY 3,339,659 2,008,496
------------- -------------
$ 4,583,612 $ 3,042,597
The accompanying notes are an integral part of these financial statements.
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LA JOLLA DIAGNOSTICS, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(A Development Stage Company)
For the Six Months Ended
December 31,
1998 1997
------------- -------------
NET SALES $ 49,962 $ 43,972
OPERATING EXPENSES
Cost of products sold 21,166 25,953
Selling and administrative expenses 230,931 275,876
Research and development 20,128 35,277
Consulting services 39,425 114,038
Depreciation and amortization 6,618 7,008
------------- -------------
TOTAL OPERATING EXPENSES 318,268 457,552
LOSS FROM OPERATIONS (268,306) (413,580)
OTHER INCOME (EXPENSES)
Interest expense (16,076) (9,908)
Minority interest 41,499 37,232
------------- -------------
TOTAL OTHER INCOME (EXPENSES) 25,423 27,324
LOSS BEFORE INCOME TAXES (242,883) (386,256)
PROVISION FOR INCOME TAXES - 3,200
NET LOSS $ (242,883) $ (389,456)
NET LOSS PER COMMON SHARE $ (0.02) $ (0.04)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 12,282,749 9,210,455
The accompanying notes are an integral part of these financial statements.
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LA JOLLA DIAGNOSTICS, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(A Development Stage Company)
For the Three Months Ended
December 31,
1998 1997
------------- -------------
NET SALES $ 6,015 $ 13,299
OPERATING EXPENSES
Cost of products sold 9,757 4,490
Selling and administrative expenses 136,092 171,530
Research and development 9,959 17,350
Consulting services 350 90,650
Depreciation and amortization 3,309 3,504
------------- -------------
TOTAL OPERATING EXPENSES 159,467 287,524
LOSS FROM OPERATIONS (153,452) (274,225)
OTHER INCOME (EXPENSES)
Interest expense (3,813) (3,017)
Minority interest 29,868 19,152
------------- -------------
TOTAL OTHER INCOME (EXPENSES) 26,055 16,135
LOSS BEFORE INCOME TAXES (127,397) (258,090)
PROVISION FOR INCOME TAXES - 3,200
NET LOSS $ (127,397) $ (261,290)
NET LOSS PER COMMON SHARE $ (0.01) $ (0.03)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 12,614,039 9,876,452
The accompanying notes are an integral part of these financial statements.
<Page 5>
LA JOLLA DIAGNOSTICS, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(A Development Stage Company)
For the Six Months Ended
December 31,
1998 1997
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (242,883) $ (389,456)
Adjustments to reconcile loss to net cash
used in operating activities
Depreciation and amortization 6,618 7,008
Minority interest 168,802 56,946
Issuance of stock for services 63,384 272,496
Changes in assets and liabilities
(Increase) decrease in inventories (1,000) 4,768
(Increase) decrease in accounts receivable (7,803) 370
(Increase) decrease in other assets (5,735) (19,978)
Increase (decrease) in liabilities (19,656) (6,627)
NET CASH USED IN OPERATING ACTIVITIES 204,610 84,009
CASH FLOWS USED IN INVESTING ACTIVITIES
Advances (to)/from shareholder, net 1,246 (2,807)
Capital expenditures for property and equipment - (2,273)
NET CASH USED FOR INVESTING ACTIVITIES 1,246 (5,080)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock - 39,500
Proceeds from notes payable, net 57,991 48,300
Payments on capital lease obligations (544) 3,656
NET CASH PROVIDED BY FINANCING ACTIVITIES: 57,447 84,144
NET INCREASE (DECREASE) IN CASH 20,420 (4,945)
CASH AT BEGINNING OF PERIOD 1,307 13,275
CASH AT END OF PERIOD $ 21,727 $ 8,330
The accompanying notes are an integral part of these financial statements.
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LA JOLLA DIAGNOSTICS, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Development Stage Company)
A. Summary of Significant Accounting Policies:
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements and
related notes have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission for Form 10-QSB. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments, consisting of a normal recurring nature considered
necessary for a fair presentation, have been included. It is suggested that
these financial statements are read in conjunction with the financial
statements and notes thereto included in the Company's annual report on
Form 10-KSB for the year ended June 30, 1998. The results of operations for
the six month period ended December 31, 1998 are not necessarily indicative of
the operating results for the year ended June 30, 1999. For further
information, refer to the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-KSB for the fiscal year
June 30, 1998.
B. Inventories:
Inventories as of December 31, 1998 and June 30, 1998 are comprised of
the following:
December 31, 1998, June 30, 1998
unaudited
------------- -------------
Antisera at original value $ 4,150,579 $ 4,150,579
Less reserve (1,683,668) (1,683,668)
Antisera products, net 2,466,911 2,466,911
Healthcare products 15,027 14,730
Diagnostic products 492,703 -
------------- -------------
$ 2,974,641 $ 2,481,641
C. Net Loss Per Common Share:
Net loss per common share is computed by dividing the net loss by the weighted
average number of common shares outstanding during the period. For the six
month periods ended December 31, 1998 and 1997, the Company's common stock
equivalents were antidilutive and, therefore, were not included in the
computation of net loss per common share.
In February 1997, the FASB issued Statement of Financial Accounting Standards
No. 128, "Earnings per Share," (SFAS 128) which is required to be adopted on
December 31, 1998. The Company has changed to this method and is currently
using this method to compute earnings per share. Under the new requirements
for calculating primary earnings per share, the dilutive effect of stock
options will be excluded. The impact of SFAS No. 128 has not resulted in any
change to primary earnings per share for the six month periods ended December
31, 1998 and 1997. The impact of SFAS No. 128 on the calculation of fully
diluted earnings per share for these periods is expected not to be material.
D. Related Party Transactions:
During the six months ended December 31, 1998 and 1997, various shareholders
and directors of the Company provided consulting and research and development
activities related to the business activities and products of the company.
In connection with these services, during the six months ended December 31,
1998 and 1997, the Company recognized research and development of $20,128 and
$35,277 and consulting expenses of $39,425 and $114,038, respectively.
E. Supplemental Cash Flow Information:
Interest and Income Taxes Paid
Cash paid for interest and income taxes for the six months ended December 31,
1998 and 1997 (unaudited) were as follows:
December 31, 1998 December 31, 1997
----------------- -----------------
Interest $ 315 $ 430
Income taxes $ - $ -
F. Use of Estimates:
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimated and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
<Page 7>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
This Quarterly Report on Form 10-QSB contains forward-looking statements that
involve risks and uncertainties. The Company's actual results may differ
significantly from the results discussed in the forward-looking statements.
Forward-Looking Information - General
This report contains a number of forward-looking statements which reflect the
Company's current views with respect to future events and financial
performance. These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or those anticipated. In this report, the words
"anticipates", "believes", "expects", "intends", "plans", "may", "future", and
similar expressions identify forward-looking statements. Readers are cautioned
to consider the risk factors described above and in the Company's Annual Report
on Form 10-KSB for the year ended June 30, 1998, and not to place undue
reliance on the forward-looking statements contained herein, which speak only
as of the date hereof. The Company undertakes no obligation to publicly revise
these forward-looking statements, to reflect events or circumstances that may
arise after the date hereof.
Additionally, these statements are based on certain assumptions that may prove
to be erroneous and are subject to certain risks including, but not limited to,
the Company's ability to introduce new products, the concentration of the
Company's current products, technological change and increased competition in
the industry, the Company's ability to manage its growth, its limited
protection of technology and trademarks, the Company's dependence on limited
suppliers, representatives, distributors, and its dependence on certain key
personnel within the Company. Accordingly, actual results may differ, possibly
materially, from the predictions contained herein.
Liquidity and Capital Resources
The Company, in the past, has financed operations primarily through the private
placement of common stock, issuance of convertible debt, warrant conversions,
issuing warrants to acquire stock in exchange for services rendered and to a
lesser degree from product sales. Based on its current operating plans, cash
generated from projected sales may not generate the necessary capital to fully
support development of the Company's products through June of 1999 and the
Company will continue to employ use of equity financing to allow the Company to
continue its operations. The Company anticipates that the proceeds from
conventional private placements of stock, issuance of convertible debt and
exercise of warrants and options will continue to enhance working capital.
On September 16, 1998, the Company, through a newly formed subsidiary,
DiagnosTech, Inc., purchased the assets and technologies of AmTech Scientific,
Inc. (ATS), a privately held diagnostic company. These assets include a
proprietary, patent pending diagnostic test for active tuberculosis (TB). The
accuracy and efficacy of the TB test has been confirmed in three separate
clinical trials, and is currently approved for sale and distribution in several
countries with approvals pending in others.
<Page 8>
Clinical trials on the test have been successfully completed at Beijing
Children's Hospital, and the formal registration application for the product is
being submitted to the Chinese Ministry of Health this coming March. In
addition, a Japanese pharmaceutical company, having successfully completed
internal testing, is in the process of registering the product with the
Japanese Ministry of Health.
Other assets acquired by La Jolla Diagnostics include a rapid diagnostic test
for HIV I and II, H. Pilori, and Hepatitis B. Additionally, DiagnosTech added
the management team of ATS, Stephen C. Roberts, M.D., and G. Bruce Whitfield,
J.D.
The rapid diagnostic HIV test is particularly suited for the environmental
conditions found in Africa, because it is easy to use, and maintains its
sensitivity even when subjected to extreme changes in temperature and humidity.
A large African marketing firm has made a sample purchase of the product and
plans to place a bulk order during the first quarter of 1999 for wide
distribution in a manner which will make it readily accessible to major
populations.
DiagnosTech is in the midst of a 504 Reg. D stock offering for $1,000,000.
Approximately one million (1,000,000) shares are being offered at one dollar
per share on a best efforts basis. As of February 12, 1999, $275,000 of new
capital had been raised. The proceeds are being used to increase manufacturing
capability, expand marketing and sales, fund additional research and
development, and enhance working capital.
Results of Operations.
Generally. The Company believes that with its business objectives in place and
proper funding, the Company should be able to meet its future expansion plans.
Management has implemented a variety of procedures and marketing efforts which
may enhance revenues and reduce costs for the Company. The Company is
beginning the on-line sales and marketing of its nutraceuticals and other
healthcare products. In addition, the Company is currently in negotiations to
obtain the exclusive Internet marketing rights for additional unique products
and expects to add these to its menu of products offered shortly.
For the Six Months Ended
December 31,
1998 1997
------------- -------------
Revenues $ 49,962 $ 43,972
Cost of products sold (21,166) (25,953)
Other operating expenses (290,484) (432,199)
Loss from operations (268,306) (413,580)
Net loss $ (242,883) $ (389,456)
<Page 9>
The Company experienced a net loss of $242,883 for the six month period ending
December 31, 1998, compared with a net loss of $389,456 for the same period
ending December 31, 1997. On a consolidated basis, the Company had sales
totaling $49,962 for the six months ended December 31, 1998, compared with
$43,972 in sales for the Company for the same period ending December 31, 1997.
Cost of product sales and operating expenses for the six months ended December
31, 1998 were $311,650 compared to $458,152 for the six months ended December
31, 1997. The decrease in costs of products sold and operating expenses of
$146,502 is a direct result of having less reliance on outside consultants.
Financial Resources
At December 31, 1998, the Company had current assets of $584,361 which includes
inventory of $15,026 healthcare products, $492,703 diagnostic products and
$25,987 in prepaid expenses.
The $2,466,911 in antisera inventory was valued by several independent
unrelated parties (brokers) as of June 1994 to be in excess of $4.1 million on
a bulk sale basis. The valuation was substantiated by an independent research
scientist as of June 1995 and 1996. During June 1997, the carrying value of
the antisera was marked down by approximately 40% to facilitate the close out
sale of the product by the Company.
The antisera inventory consists of antibody reagents used in clinical
diagnostic laboratories that analyze serum for immunoglobulin profiles. The
antisera is kept frozen and is believed to have a shelf life in excess of
twenty years.
DiagnosTech, Inc.
On September 16, 1998, the Company acquired the assets of AmTech Scientific,
Inc. (ATS), a diagnostic company, by establishing a subsidiary, DiagnosTech,
Inc. DiagnosTech, Inc. is capitalized by 6,000,000 shares of La Jolla
Diagnostics, Inc.'s common stock, the Company's antisera inventory and other
diagnostic technologies. Through the Company's subsidiary, DiagnosTech, Inc.,
the company acquired the stock of ATS in exchange for 6,000,000 shares of the
Company's stock and a certain number of DiagnosTech, Inc. shares. This
transaction was made pursuant to the acquisition of the technology. The
acquisition is to be accounted for as a pooling-of-interests.
Research and Development
The Company conducts research and development in four areas. The Company
maintains an active research and development program in the areas of ophthalmic
products, nasal sprays, nutraceuticals, and products for the symptomatic relief
of allergies, and immuno/molecular diagnostics using a network of consultants
in addition to its internal staff and facilities.
The research and development activities being performed by the Company are
designed to discover and screen potential consumer health care and diagnostic
products. Activities underway at the present time include the following for
the Healthcare Products and diagnostic products through DiagnosTech, the
Company's subsidiary.
<Page 10>
Heathcare Products
The Healthcare Products Division is largely based on products using proprietary
processes. Products being marketed or under development include:
Feverfew Nasal MistTM (currently being marketed)
Feverfew Nasal MistTM is being marketed by La Jolla Diagnostics, Inc. as a
moisturizing nasal spray. It uses the same clustered water borate buffering
system as the company's enthusiastically received Living Water Eye LotionTM.
Feverfew Nasal MistTM is designed to avoid interference with natural functions,
as it moistens, soothes and clears the nasal passages.
The Company intends to investigate the possibility that its patent pending
moisturizing nasal spray, Feverfew Nasal Mist, may also be effective in aiding
in the alleviation of the symptoms of migraine, menstrual and hangover
headaches. If the results of the investigation are promising, (and there can
be no assurance that they will be) the Company intends to pursue the regulatory
processes necessary to add an indication to its labeling for the product's use
with migraines.
The Company has applied for a patent on the product, which was introduced to
the market during April 1997 and thus far is being extremely well-received.
Leading alternative medicine doctors have endorsed the product.
MigraSprayTM (currently being marketed)
MigraSprayTM , a saline solution containing the herb feverfew, is designed to
be sprayed under the tongue. This sublingual method of administration is
believed to promote excellent absorption.
Feverfew is the common name for Tanacetum parthenium, a flowering plant related
to the chrysanthemum, whose leaves have been used for centuries in herbal
remedies for the treatment of various conditions, including migraine headaches.
MigraSprayTM can be promoted for the treatment of migraine headaches because it
is classified as a nutraceutical and therefore does not have the compliance
issues as determined by the FDA.
<Page 11>
Other Nasal Sprays
The Company is investigating other nasal spray possibilities, including a
product for the symptomatic relief of allergies.
Living Water Eye LotionTM (currently being marketed)
Living Water Eye LotionTM is an eye wash or irrigating solution, used in
cleansing the eye to help relieve irritation, burning, stinging, and itching
due to loose foreign material, air pollutants (smog or pollen), or chlorinated
water. The solution is a specially clustered water borate buffered, sterile
isotonic aqueous solution containing sodium chloride. It is preserved with a
mild preservative, 0.1% sorbic acid and disodium EDTA (ingredients commonly
used in solutions for sensitive eyes).
Living Water Eye LotionTM is specially formulated to enhance eye comfort by
irrigating, flushing and cleansing without interfering with natural functions.
In contrast with "eye lubricants," "Artificial Tears," and "Lens Lubricants,"
which contain ingredients which increase fluid viscosity in an attempt to
relieve eye dryness or re-wet contact lenses; "eye redness relievers," which
contain vasoconstrictors which can cause eye problems when used too frequently;
and eye drops, which contain antihistamines to treat allergy symptoms.
The product has been marketed for more than a year and has generally exceeded
the expectations of customers using the product.
OptoPet Eye WashTM (currently being marketed)
OptoPet Eye WashTM is for cleansing the eyes of dogs and cats and removing
mucous which causes staining beneath the eyes (a major problem in certain
breeds).
The product has been introduced to pet stores and veterinarians through a
national public relations campaign in pet magazines and the general press. The
initial response to this publicity has been encouraging.
Other Ophthalmic Products
The Company is developing additional eye solutions using the ClusterWater
technology, including a product for the symptomatic relief of allergies and the
treatment of glaucoma.
Drug Delivery Licensing
The Company is in contact with several major pharmaceutical companies in
regards to the licensing of the ClusterWater technology as a more efficient
drug delivery system for ophthalmic, nasal, injectables, parenterals and oral
medications. Results of recent meetings have been encouraging.
<Page 12>
DiagnosTech, Inc.
DiagnosTech, Inc., is developing and marketing clinical diagnostic products
using immunologic and molecular biologic technologies. The product line now
consists of eight self-contained, rapid, point-of-care diagnostics:
A rapid test for active M. tuberculosis (TB) disease.
A rapid serum/plasma test for HIV I and II (AIDS) infection.
A rapid whole blood test for HIV I and II (AIDS) infection.
A rapid test for H. pylori infection (the causative agent in
over 90% of ulcers).
A rapid test for hepatitis B (hepatitis B surface antigen:
HBsAg).
A rapid pregnancy test.
A rapid test for Trypanasoa cruzi infection (Chagas disease: a
common and often fatal parasitic infection endemic to many parts
of South and Central America).
A rapid test for Toxoplasma gondii infection (Toxoplasmosis: a
common opportunistic infection among AIDS patients).
The Company believes each of these diagnostic products to be uniquely
advantageous, only secondary to certain proprietary technology, know-how, and
formulations employed by the Company, and that the TB test in particular has no
equivalent in the marketplace. Each test requires only a very small sample of
patient blood, serum, urine, or saliva, as the case may be. Each test gives an
accurate result in 1 to 5 minutes. These tests can easily be performed by any
healthcare worker, semi-skilled technician, or by the patients themselves.
They are extremely rugged, require no refrigeration, and have a shelf life of
12 to 18 months. No special equipment is required to perform any test. Each
test addresses a large and growing market both domestically and
internationally.
Each of the diagnostic tests manufactured and marketed represent state-of-the-
art technology in that they are rapid, accurate, easy-to-use, and inexpensive.
These characteristics make the products ideal for both the U.S. and overseas
markets. Changes in the economics of medicine increasingly favor products that
can be employed economically and effectively at the point-of-care. Outside of
the industrialized world, citizens of emerging economies seek access to
healthcare as a high priority. Tests that address significant medical needs,
are available at a modest price, and require no special instrumentation, are in
high demand. Sale efforts utilizing 75 international distributors over the
past few months are beginning to show results. DiagnosTech expects to receive
substantial orders of the products in the near future.
Antisera
The Company has transferred its antisera inventory to DiagnosTech. It consists
of high quality, highly purified antibodies which are needed for basic research
and clinical immunological assays. The primary users of these antisera
products include universities and other research facilities, clinical
diagnostic laboratories, hospitals and clinics, where certain antibody reagents
are used in large volumes. The Company through its subsidiary, DiagnosTech is
currently in a position to market the antisera inventory aggressively.
<Page 13>
Myocardial Infarction Predictor
The Company has filed for patent application on a novel method of identifying
risk factors for myocardial infarction among a certain subset of mature people.
The company intends to market an inexpensive test which would be used for
screening purposes. Those with this risk factor are several times more likely
to experience morbidity or mortality from a condition which may be ameliorated
by changes in living conditions and life style. This technology was turned
over to DiagnosTech for development of the final diagnostic kit and for
marketing.
<Page 14>
EXHIBIT 17.2
OTHER
The Registrant has announced that a letter of resignation from the board of
directors has been received from Robert N. Hamburger.
<Page 15>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Date: February 24, 1999 LA JOLLA DIAGNOSTICS, INC.
By: /s/ Don Brucker
----------------------
Don Brucker
President, Chief Executive Officer
and Chief Financial Officer
<Page 16>
